There are currently over 85,400 Bitcoin (Cryptocurrency: BTC) According to the latest data, the world’s billionaires Crypto Asset Report From Henry & Partners. This is much more than any other cryptocurrency, and it tells you everything you need to know about Bitcoin’s performance over the past 10 years. For seven of the past 10 years, Bitcoin has been the world’s best-performing asset, and nothing even comes close.
Its outstanding performance transformed Bitcoin from a tiny $100 cryptocurrency in 2013 to the $60,000 behemoth it is today. If you bought Bitcoin early and held onto it through multiple market downturns, you’re likely a millionaire. But what about now? Could you become a millionaire by investing a similar amount in Bitcoin today?
millionaire math
Let’s start with the math of millionaires. For the sake of argument, let’s assume you have $1,000 available to invest today and plan to invest all of it in Bitcoin. To turn that $1,000 into $1 million, you need a 1,000x return on investment.
How realistic is that? Some of the most bullish price predictions have Bitcoin reaching $1 million by 2030. Considering Bitcoin’s current price is $60,000, this means a 16x return on investment. That’s a great number, but it’s far from the 1,000x return you need. And this is nowhere near the 600x return that Bitcoin has enjoyed over the past decade.
To achieve a 1,000x return, the price of Bitcoin would need to reach $60 million. Given that the maximum lifetime supply of Bitcoin is 21 million coins, the market capitalization would be over $1,000 trillion. This number easily exceeds the total value of the global stock market ($100 trillion). And this is even higher than the value of all global wealth, which is estimated to be nearly $600 trillion by 2027. Therefore, given the relative size of today’s finance, a price target of $60 million is not very realistic. market.
Bitcoin millionaire maker scenario
But all is not lost if you decide to become a Bitcoin millionaire. In fact, many smart people believe Bitcoin could approach its $60 million price target.
For example, in July, Michael Saylor Micro Strategy Co., Ltd. (NASDAQ:MSTR) He predicted that Bitcoin would reach $13 million by 2045. This was his basic scenario. His bullish scenario called for Bitcoin to reach $49 million. And if you spend just a few minutes on YouTube, it’s easy to find investors predicting Bitcoin’s future price to be over $100 million.
What all of these apparently outlandish price predictions have in common is the core belief that Bitcoin will one day replace the US dollar as the world’s reserve currency. It is believed that over a long enough period of time, the modern financial system will eventually abandon the dollar and adopt Bitcoin.
According to this scenario, the ever-growing mountain of US debt ($35 trillion) would one day collapse. At some point, we can’t print any more money to cover this debt. Therefore, the dollar collapses and the value of dollar-denominated assets falls. As a result, the world needs to find a new reserve currency, and this is where Bitcoin comes into the picture. Just as the world once ran on a gold standard, the world will one day run on a Bitcoin standard.
Is Bitcoin still the best billionaire maker?
Be careful what you wish for. If you want to become a Bitcoin millionaire with a modest investment of $1,000, the only way that can happen is if the entire financial system crashes and Bitcoin takes over.
That being said, I am still bullish on Bitcoin long-term and believe that Bitcoin’s value will continue to rise over the next 10 years. However, I also realize that investing in cryptocurrencies other than Bitcoin has a much higher chance of becoming a millionaire.
The key is to find a cryptocurrency that looks a lot like Bitcoin in 2010, when someone would pay 10,000 Bitcoin for two pizzas. If you can buy this cryptocurrency when it is still trading at a very low price and then hold onto it for years as it rises rapidly in value, one day you will be sitting on a very nice nest egg. You may notice that
Should you invest $1,000 in Bitcoin right now?
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Dominique Basurto has a position in Bitcoin. The Motley Fool has a position in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Will investing $1,000 in Bitcoin make you a millionaire? Originally published by The Motley Fool
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